Comic Economics: 101

by Bob Jackson

Exclusive to STR

The comic book specialty store fills a need in much the same way as did the barbershop of yesteryear.  Often, customers come in to talk as much as read, and there’s no limit to the topics: relationships, politics, business, jobs, games, or anything else that may be on a visitor’s mind.  Economic shocks like the recent spike in gas prices often crop up in people’s conversation.  But the very surrounding shelves of wonderful graphic novels can provide a wonderful antidote to the inevitable socialist bromides that rattle loose from many people’s lips.  A poor soul can be guided back onto the path of economic common sense with a few examples understandable to a 12-year-old.  

FREE TRADE.  The Internet has brought together fans and creators of comics from around the world.  Someone can produce a beautiful page of sequential art in Argentina , and create a digital copy of the work viewable by a fan thousands of miles away.  Printing and shipping services are also available on a worldwide basis at competitive rates.  The result is that there are a larger variety of comic choices in print and on the web than ever before.  This is a direct result of people being able to exchange freely at prices mutually satisfactory to the trading parties.  For example, a fan may want to publish a comic of his own.  If the fan finds three equally talented artists at points A, B, and C on the globe, he can have an equally satisfying transaction with any of the three because the artwork can be transmitted digitally almost instantly.  He then might choose artist A in Argentina because after the currency destruction recently experienced by the Argentines at the hands of their central bank, A will bid his services to willing buyers for just a few dollars.  Because of the inexpensive services of artist A, the comic can become a reality because enough money remains to pay a printer and distributor afterward.  But let a protectionist authority enter the picture to “protect the living standards of C,” and the result is no comic at all.  Artist C’s prices don’t leave enough money to cover the other costs of production, so a transaction never occurs and none of the parties benefit.  

In some cases, the aspiring publisher might remain very determined to create the comic over the cost obstacle of C and increase his budget for the book.  This extra money might come from cutting out a home landscaping service and a biweekly restaurant dinner.  Or the money could be borrowed, competing with other borrowers in the market to drive up the interest rate.  In this second scenario, the comic might still be published, but a restaurateur, a landscaper, or someone trying to buy a home will suffer an unseen economic loss because of it.  In the above examples, protectionism resulted in fewer beneficial exchanges between actors and possibly no comic at all.  Beyond the immorality of it, it reduces choices in the marketplace.     

PRICE.  Today, most newly published comics hit the stands with a $2.99 price tag.  Those that languish on the shelves unsold eventually find their way to the 50 cents or quarter box.  On the other hand, a title that has more people looking for it than it has copies available for sale on store shelves can be quickly bid up to double the cover price or more.  A comic is worth only what someone is willing to pay for it.  The printed $2.99 on the cover is a valid price only if there are consumers of comics who believe it’s a good deal.  The comic shop owner cannot guarantee a price in a free market.  He can only guess at prices.  For example, how many people will think the comic book adaptation of this summer's anticipated movie blockbuster is a good deal?  If he buys too few for his store and the book is a hit, he'll quickly run out.  On top of having dissatisfied customers, he very likely would have sold his books at retail prices before they were bid up in price.  On the other hand, if he overbuys this title and too many others, he may soon be holding a final "going out of business" sale.  

PRICE GOUGING. Comics and water are a bad mix.  So a sub-sea-level comics shop in the gulf probably suffered huge losses in the aftermath of last year’s hurricanes.  The natural result of the destroyed shipments is that the comic readers in those areas would not be able to get them, not even the most rabid fans.  But an enterprising merchant who had knowledge of the number of comic-crazy fans in the disaster area might consider the number of three-times-cover-price customers there worth servicing.  Then gassing up the van and saying goodbye to the wife and kids for the difficult cross-country run would make good business sense.  But let a state prosecutor who's ready to fine or jail him for "gouging" once he arrives enter the picture.  The trip is turned into a poor business decision for the shop owner.  He doesn’t make it, and that means the readers in the disaster area simply don’t get any comics that week.  In other words, a shortage is created by a political decision.  

Is the carry trade in currencies a bit daunting to wrap your mind around?  Turn it into a collectible comic book scenario.  You’ll borrow three dollars from your brother today to buy Hot Comic #1 and pay him back three bucks in two Saturdays when you resell the mag for five at a convention that weekend, pocketing the two dollars difference.  Often, changing the good or service makes all the difference in understanding the principles at work.  

When you find yourself listening to some clueless individual’s angry Marxist rant, reach him where he lives.  If he’s ignorant about how gasoline gets to the corner service station, but he stays immersed in a world of music CD’s, visit him there.  Even irrational people can be put off by common sense.  It’s a terrific weapon for our side in fighting for private property and the free use of it.